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© www.taxdebtanonymous.com 2010 Unagreed Collection Alternatives

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Unagreed Collection Alternatives

Welcome to TaxMama’s Place Home of the

08/15/11

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http://www.cpelink.com/?s=85iz6kg


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Table of Contents

Meet Your Instructors Fast Track Mediation Collection Appeals

Collection Due Process Collection Appeal Process Equivalency Hearing

Tax Court Court of Appeals, Court of Claims, District Court Bankruptcy Protective Filings

Evaluations and Thanks!

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Who is Eva Rosenberg MBA, EA

Eva Rosenberg, EA, Your TaxMama® has been teaching Enrolled Agents Exam review courses off and on since developing the program for UCLA Extension over 15 years ago. These days, she’s teaching her own course online at www.irsexams.com

Eva has a BA in Accounting and an MBA in International business. Your TaxMama® is a TaxWatch columnist for Dow Jones' www.MartketWatch.com and author of the ever-popular book, Small Business Taxes Made Easy, published by McGraw-Hill – new edition – just released!

As a speaker, TaxMama® is popular with both tax professionals and taxpayers. You can find her at www.TaxMama.com and subscribe to her free daily podcast at www.TaxQuips.com

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http://www.irsexams.com/



http://www.martketwatch.com/



http://www.taxmama.com/

http://www.taxquips.com/





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Who is Tom Buck, CPA

Tom Buck, CPA is a published author, tax coach, teacher And mentor. He has been a licensed CPA since 1971 and has been in private practice since 1982.

Tom was chairman of the Nevada Society of CPAs Taxation Committee. Tom has been representing taxpayers and solving IRS problems ever since the landmark Casino employee cases in 1982.

The approach Tom takes and that he would like to pass on to you is this:the “science” of the work is the law and how it should be applied. The

“art” is being able to counter any and all IRS measures which are not supported by law. Does the IRS always follow the rules? Of course not, so part of the “art” is really in forcing the IRS to obey the law. Of course, having the tenacity of a bulldog is often the critical ingredient. In the final analysis, once you determine what the outcome should be, then you must be ready to take any detours necessary to get your client to the finish line.

Tom is a willing and helpful teacher and looks forward to sharing his hard-gained knowledge.

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Who is Sonya Wilt, EA

Sonya Wilt, BS in Management, EA and entrepreneur. A graduate of Upper Iowa University, Fayette, and former student of Eva Rosenberg’s Enrolled Agent Review Course, Sonya also has an extensive background in management and accounting, small business consulting, and employee training

Sonya’s desire to stay on top of the changes in tax law is two-fold: 1) To make sure her investments and entities are taking advantage of

every legal tax deduction available with adequate documentation, and…

2) 2) To provide our clients with accurate information so they may make solid decisions in both resolving current tax issues and legally protecting their future earnings.

Sonya and her partner, Tom Buck, CPA aggressively represent clients before state and federal taxing authorities through audits, appeals and collections.

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Page 6Special Guest - Jaime Buchwald, CPA

Special Guest – Jaime Buchwald, CPAhttp://snurl.com/pitbulltax

Jaime is the CEO and Co-Founder of PitBullTax Software. He practices exclusively in the area of tax controversy and criminal tax litigation support. Jaime has handled countless IRS collection, audit, and appeals cases and has saved his clients millions of dollars in the process. Among notable cases, he recently was on the defense team representing a commodities and foreign exchange dealer in a $40 million federal fraud, tax evasion, and criminal forfeiture proceeding before the FBI, IRS Criminal Investigation Division and the U.S. Department of Justice.

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http://snurl.com/pitbulltax






The Practice Series So Far

This is what we have already covered in this course:

IRS Practice Series: 10 Steps to Release IRS Levies on Paychecks or Bank Accounts

IRS Practice Series: 10 Steps to Resolving Collection Issues

IRS Practice Series: Hands-on Collections Workshop

IRS Practice Series: 6 Simple Steps to an Offer-in-Compromise: Completing (form 656)

If you’ve come this far, done everything right – and still had your OIC rejected, what now?

Never fear! There’s more you can still do!

http://www.cpelink.com/product/detail.php?p=2199











Overview

Today’s Course is an Overview of your Alternatives. In the one precious hour we have, can’t get into great depth.

We’ll give you a taste of the things you can still do –Point you to more information and key forms

And …we have a guest who will show what you can do – How YOU will be able to rescue even the worst case from the

depths of…

Most cases CAN be resolved!



Page 9Fast Track Mediation

Fast Track Mediation (FTM)

Pilot program in 2000 – was tested through 2008http://www.irs.gov/pub/irs-drop/rp-03-41.pdf Optional alternative Handled within Appeals Division Extremely under-utilized Specially trained, independent Appeals Officer – bulldogs Determination not binding – purely voluntary

IRS Form 14017 – Request for FTMhttp://www.irs.gov/pub/irs-pdf/f14017.pdf

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Page 10Fast Track Mediation – When

Qualifications - Who gets in?

The Internal Revenue Service now offers fast track mediation services to help taxpayers resolve many disputes resulting from:

· examinations (audits)· offers in compromise· trust fund recovery penalties· other collection actions (for example, certain qualifying

collection due process cases) Most cases that are not docketed in any court qualify for fast track mediation

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Fast Track Mediation – When Not

Qualifications - Who doesn’t? Excluded Cases / Issues

· Issues for which there is no legal precedent · Issues where the courts have rendered opposing or differing

decisions in different jurisdictions· Industry Specialization Program issues· An issue for which the taxpayer has filed a request for

competent authority assistance · Service Center penalty appeals cases· Service Center Offer in Compromise cases · Collection Appeals Program cases · Automated Collection System cases · Constitutional issues



Page 12Collection Appeals

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Collection Appeals

Offers in compromise

Denial of Penalty abatement requests

Proposed Trust Fund Recovery Penalties



Page 13 Collection Due Process

Collection Due Process – CDP

Tolls Statute of LimitationsStay of collections activitiesCan petition court if not satisfactoryCan dispute underlying liability, but only if the taxpayer did not receive a statutory notice of deficiency (if applicable) or did not otherwise have an opportunity to dispute the taxAppeals Officer is someone outside the IRS Collection Division who takes an unprejudiced look at the case to determine whether the proposed collection action (levy, seizure, etc.) is appropriate

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Collection Due Process – When & HowWithin 30 days of receiving 1058 letter, other notice of intent to levy

File Form 12153 - Request for a Collection Due Process or Equivalent HearingOrIn writing, and must contain the taxpayer's name, address, and phone number, the type of tax and tax periods, and a statement of the reasons the taxpayer disagrees with the filing of the lien or the threatened levy.

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Collection Due Process – Withdrawal

Do not withdraw a CDP request.

Appeals officers are far more cooperativeCDP stops collectionsIf you withdraw and refile 12153, you are beyond the original 30 days so you’ve lost the clients rights to judicial review and the IRS can still pursue collections during negotiations

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Page 16 Collection Appeal Program

Collection Appeal Program – CAPBefore or after collection activity in place

Default, termination or rejection of installment agreement – appeal

within 30 days of notification

Appeal liens, levies, seizures

Supposed to be fast

No right to judicial review for CAP decision

Cannot challenge existence of tax liability or amount of tax

liability

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Page 17 Collection Appeal Process

Collection Appeal Process - CAP– When & How

Request appeal from Collections Manager

File Form 9423 filed within 2 days of manager conference or 30 days of receipt of notice when not dealing with RO

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Page 18 Equivalency Hearing

Equivalency Hearing

Same form as CDP request – 12153

Similar in procedure to CDP, but

Does not Toll Statute of Limitations

Does not force stay of collections activities

Can not petition court if not satisfactory

Up to a year after collection action begins

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Courts

Tax Courthttp://www.ustaxcourt.gov/

U. S. Court of Federal Claimshttp://www.uscfc.uscourts.gov/

U.S. District Court http://www.uscourts.gov/districtcourts.html

U.S. Courts site - http://www.uscourts.gov

What’s the big difference?

http://www.ustaxcourt.gov/



http://www.uscfc.uscourts.gov/





http://www.uscourts.gov/districtcourts.html





http://www.uscourts.gov/





Differences

1) You can file a petition in Tax Court without paying first.

To file suit in the other Federal Courts, you have to pay the balance due in full first.

2) We may be able to run our client’s whole Tax Court case (Small Case) without being able to practice in Tax Court.

We can’t do that in other Federal Courts. We can simply support counsel with good documentation



The Flow Chart



Small tax case procedure

If the amount in your case is $50,000 or less for any one tax year or period, you can request that your case be handled under the small tax case procedure. If the Tax Court approves, you can present your case to the Tax Court for a decision that is final and that you cannot appeal.

You can get more information regarding the small tax case procedure and other Tax Court matters from the United States

Tax Court,400 Second Street, N.W., Washington, DC 20217.

More information can be found on the Tax Court's website at www.ustaxcourt.gov.

Small Case Tax Petition Kit online at the U.S. Tax Courts website (http://www.ustaxcourt.gov/forms/Petition_Kit.pdf).

Fill in all the forms online and print them out. The fee is still only $60.

http://www.irs.gov/publications/p3920/index.html



http://www.irs.gov/publications/p556//app/scripts/exit.jsp?dest=http%3A%2F%2Fwww.fema.gov





District Court and Court of Federal Claims

District Court and Court of Federal Claims Generally, the District Court and the Court of Federal Claims hear tax cases only after

you have paid the tax and filed a claim for a credit or refund.

When your claim is totally or partially disallowed by the IRS, you should receive a notice of claim disallowance. If the IRS does not act on your claim within 6 months from the date you filed it, you can then file suit for a refund.

You generally must file suit for a credit or refund no later than 2 years after the IRS informs you that your claim has been rejected. However, you can file suit if it has been 6 months since you filed your claim and the IRS has not yet delivered a decision.

You can file suit for a credit or refund in your United States District Court or in the United States Court of Federal Claims.

However, you cannot appeal to the United States Court of Federal Claims if your claim is for credit or refund of a penalty that relates to promoting an abusive tax shelter or to aiding and abetting the understatement of tax liability on someone else's return.



US District Court

The United States district courts are the trial courts of the federal court system. Within limits set by Congress and the Constitution, the district courts have jurisdiction to hear nearly all categories of federal cases, including both civil and criminal matters. Every day hundreds of people across the nation are selected for jury duty and help decide some of these cases.

There are 94 federal judicial districts, including at least one district in each state, the District of Columbia and Puerto Rico. Three territories of the United States -- the Virgin Islands, Guam, and the Northern Mariana Islands -- have district courts that hear federal cases, including bankruptcy cases. (Printable Circuit/District map (pdf))

Bankruptcy courts are separate units of the district courts. Federal courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in a state court.

http://www.uscourts.gov/FederalCourts/UnderstandingtheFederalCourts/DistrictCourts.aspx













US Court of Federal Claims

The United States Court of Federal Claims has jurisdiction over most claims for money damages against the United States, disputes over federal contracts, unlawful "takings" of private property by the federal government, and a variety of other claims against the United States.

The general jurisdiction of the Court, is described in 28 U.S.C. § 1491



Court of Appeals

If these lower courts turn you down, you may appeal.

• Tax Court – General Procedure• District Court• Court of Federal Claims



Page 27Bankruptcy

Bankruptcy – Understanding the Rules

3 year rule

2 year rule

240 day rule

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Page 28Bankruptcy

Bankruptcy –

• Why Chapter 7 bankruptcy is better than Chapter 13

• Qualifying for Chapter 7

• Find a GOOD Bankruptcy Attorney

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Page 29Protective Filings

Protective Filings

Watch your deadlines, with IRS delays, protective filings are more important than ever

Example:Documents were provided to the IRS and lost, documents were provided again to the IRS, they were received, but not yet reviewed and the 90 day deadline is approaching. If a tax court petition isn't filed within the 90 days, your client loses the ability to go to tax court

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Page 30Special Guest - Jaime Buchwald, CPA

Special Guest – Jaime Buchwald, CPAhttp://snurl.com/pitbulltax

The following case is a real case of Jaime’s.

You or I might have believed it was hopeless.

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Page 31OIC Rejection Case Study

Original Case Offer in Compromise based on Doubt as to Collectibility.Total IRS Liability - $2.7 million.Client is indicted and serves his term in prison for fraud against investors

and US government. Client is a repeat offender. Original OIC is filed in August 2009. Offer amount is $5,000 for each,

separate OIC filed for husband and for both husband & wife.

OIC RejectedRejected on January 8, 2010. Reason: offer acceptance maybe a detriment to public compliance and is

not in government’s interest (see letter attached).

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Page 32OIC Rejection – Response - Case Study

Representative’s ResponseFebruary 3, 2010 – Response letter to IRS contesting the reason for rejection (see

letter attached).February 3, 2010 – Response letter to IRS providing additional information in

regards to Asset/Equity Table (AET) prepared by IRS and protested by representative (see letter attached).

December 2, 2009 – Obtained independent legal opinion on what will have a priority: IRS lien against client’s house or judgment by the Commodity Futures Trading Commission (see letter attached).

Based on the independent opinion representative increased offer amount for joint OIC to $270,000 and husband’s OIC to $30,000.

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OIC Rejection – Won - Case Study

OIC AcceptedOIC has been accepted on May 20, 2010OIC for husband accepted for $30,000OIC for husband and wife accepted for $270,000

Savings - $2.4 million



Page 34Closing

Fast Track Mediation Collection Appeals

Collection Due Process Collection Appeal Process Equivalency Hearing

Tax Court Court of Appeals, Court of Claims, District Court Bankruptcy Protective Filings

There is always something…Supreme Court and Legislators

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Page 35Resources

Internal Revenue Manual – Part 5 is about Collections http://www.irs.gov/irm/part5/index.html IRS Alternative Dispute Resolution – all size cases, including internationalhttp://www.irs.gov/individuals/article/0,,id=96779,00.html

IRS Collections Appeals Program (CAP)http://www.irs.gov/individuals/article/0,,id=160738,00.html

Tax Court - http://www.ustaxcourt.gov/ US Court System http://www.uscourts.gov/Home.aspx

Taxpayers Advocate Service http://www.irs.gov/advocate/

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http://www.irs.gov/irm/part5/index.html

http://www.irs.gov/individuals/article/0,,id=96779,00.html

http://www.irs.gov/individuals/article/0,,id=160738,00.html




http://www.uscourts.gov/Home.aspx




http://www.irs.gov/advocate/



Page 36CPE Link

Thanks for coming.

Remember to give CPE Link your evaluations.

Drop by to sign up for other TaxMama classes – http://www.cpelink.com/teamtaxmama

The next 5 classes in the series will be taught after tax season.

Our Tax series are available as Self-Study or Resources: • International Taxpayer issues – dealing with resident aliens and

Americans overseas.• The Tax Practice Series - Taxpayer representation – Collections,

Offers In Compromise, other payment alternatives• TaxMama’s tips about tax issues and research

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http://www.cpelink.com/teamtaxmama



